Flood insurance rates could rise significantly

Published: Tuesday, March 12, 2013 at 10:36 p.m.

Last Modified: Tuesday, March 12, 2013 at 10:36 p.m.

Residents of Terrebonne and Lafourche parishes could pay significantly more for flood insurance when National Flood Insurance Program reforms take effect this fall.

Federal subsidies and premium discounts that make insurance rates more affordable are being cut from the program under a bill Congress passed last year. About 486,233 Louisiana residents have National Flood Insurance Program policies. Forty-nine percent of those policyholders have subsidized rates, according to Federal Emergency Management Agency data.

Those who live outside flood protection systems and whose homes are below base flood elevations will see the biggest impacts. Owners of homes and business properties that have flooded multiple times will also face steep increases.

Policies could cost more than $20,000 per year for residents with extremely high-risk homes, according to FEMA data.

Lafourche Parish President Charlotte Randolph said inquiries have indicated local homeowners could see an increase as steep as 15 percent to 25 percent in the next five years. Annual rate increases are limited to 20 percent.

Terrebonne Parish received word FEMA may begin phasing in the new reforms in October of this year, parish Planning and Zoning Director Pat Gordon said.

FEMA officials couldn't be reached for comment.

The government-sponsored National Flood Insurance Program is the only source of local flood insurance for homes and businesses.

The program has faced mounting debt because of natural disasters. In recent years the program has experienced repeated short-term extensions and was even allowed to expire as Congress stalled on reforming it.

The program was renewed for five years when Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012.

Lafourche and Terrebonne officials said they fear the increases will discourage residents from buying flood insurance or drop their policies.

“We promote flood insurance as an excellent method of protecting your property, and it used to be one of the cheapest methods of protecting your home,” Gordon said. “Unfortunately I think we'll see more residents drop their flood insurance policies.”

Randolph said the cost increase would make it more difficult to build new homes and businesses, especially in the southern parts of the parish.

“It appears this is going to create a disincentive to build in the lower parts of the parish,” said Terrebonne Parish Manager Al Levron.

Under the reforms, home owners whose homes are below the base flood elevations mandated in FEMA's flood maps will no longer receive discounts and will see their premiums go up.

But parish officials said they're unsure who will see rate increases because FEMA is in the process of updating flood maps for Terrebonne and Lafourche. The new maps are under review by FEMA because of disputes over the data used to create them. There is no timeline for when they might be released. The new maps significantly increased the mandated base flood elevations for homes and businesses in parts of Terrebonne and Lafourche, officials said.

The reforms will also remove grandfather clauses that have allowed home owners to keep their original flood-risk ratings even when risk was updated with new maps.

And there will no longer be subsidized rates for second homes, businesses, properties deemed by FEMA as repetitive or severely repetitive losses, and substantially improved or damaged properties. State officials have said as many as 25,000 homes in Louisiana are considered repetitive losses, meaning they have flooded multiple times.

Lafourche Parish Manager Archie Chaisson III called the reforms just another “unfunded mandate” for Louisiana. The federal government is punishing owners of homes that don't meet base flood elevations, and it only provides money to elevate homes after a disaster or a home has flooded multiple times.

Lafourche Parish is working with lawmakers to weigh its options, he said.

“It's disturbing because no mater how much we mitigate or plan to restore these communities, we keep getting thrown new challenges,” Randolph said.

Staff Writer Nikki Buskey can be reached at 857-2205 or nicole.buskey@houmatoday.com.

<p>Residents of Terrebonne and Lafourche parishes could pay significantly more for flood insurance when National Flood Insurance Program reforms take effect this fall.</p><p>Federal subsidies and premium discounts that make insurance rates more affordable are being cut from the program under a bill Congress passed last year. About 486,233 Louisiana residents have National Flood Insurance Program policies. Forty-nine percent of those policyholders have subsidized rates, according to Federal Emergency Management Agency data.</p><p>Those who live outside flood protection systems and whose homes are below base flood elevations will see the biggest impacts. Owners of homes and business properties that have flooded multiple times will also face steep increases.</p><p>Policies could cost more than $20,000 per year for residents with extremely high-risk homes, according to FEMA data.</p><p>Lafourche Parish President Charlotte Randolph said inquiries have indicated local homeowners could see an increase as steep as 15 percent to 25 percent in the next five years. Annual rate increases are limited to 20 percent.</p><p>Terrebonne Parish received word FEMA may begin phasing in the new reforms in October of this year, parish Planning and Zoning Director Pat Gordon said.</p><p>FEMA officials couldn't be reached for comment.</p><p>The government-sponsored National Flood Insurance Program is the only source of local flood insurance for homes and businesses.</p><p>The program has faced mounting debt because of natural disasters. In recent years the program has experienced repeated short-term extensions and was even allowed to expire as Congress stalled on reforming it.</p><p>The program was renewed for five years when Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012.</p><p>Lafourche and Terrebonne officials said they fear the increases will discourage residents from buying flood insurance or drop their policies. </p><p>“We promote flood insurance as an excellent method of protecting your property, and it used to be one of the cheapest methods of protecting your home,” Gordon said. “Unfortunately I think we'll see more residents drop their flood insurance policies.”</p><p>Randolph said the cost increase would make it more difficult to build new homes and businesses, especially in the southern parts of the parish. </p><p>“It appears this is going to create a disincentive to build in the lower parts of the parish,” said Terrebonne Parish Manager Al Levron.</p><p>Under the reforms, home owners whose homes are below the base flood elevations mandated in FEMA's flood maps will no longer receive discounts and will see their premiums go up.</p><p>But parish officials said they're unsure who will see rate increases because FEMA is in the process of updating flood maps for Terrebonne and Lafourche. The new maps are under review by FEMA because of disputes over the data used to create them. There is no timeline for when they might be released. The new maps significantly increased the mandated base flood elevations for homes and businesses in parts of Terrebonne and Lafourche, officials said.</p><p>The reforms will also remove grandfather clauses that have allowed home owners to keep their original flood-risk ratings even when risk was updated with new maps.</p><p>And there will no longer be subsidized rates for second homes, businesses, properties deemed by FEMA as repetitive or severely repetitive losses, and substantially improved or damaged properties. State officials have said as many as 25,000 homes in Louisiana are considered repetitive losses, meaning they have flooded multiple times.</p><p>Lafourche Parish Manager Archie Chaisson III called the reforms just another “unfunded mandate” for Louisiana. The federal government is punishing owners of homes that don't meet base flood elevations, and it only provides money to elevate homes after a disaster or a home has flooded multiple times.</p><p>Lafourche Parish is working with lawmakers to weigh its options, he said.</p><p>“It's disturbing because no mater how much we mitigate or plan to restore these communities, we keep getting thrown new challenges,” Randolph said. </p><p>Staff Writer Nikki Buskey can be reached at 857-2205 or nicole.buskey@houmatoday.com.</p>